On Prudential Carve-out In GATS

The financial industry is the cornerstone of the tertiary industry in the economy and is an important foundation for sustained economic development in all countries.The World Trade Organization(WTO)has,through the General Agreement on Trade in Services(GATS),conducted principles and specific The formulation of rules.Financial services trade is also one of the important departments in this field.In recent years,the financial crisis of various countries has occurred many times,and the importance of prudential supervision of the domestic financial industry has become increasingly prominent.However,the related financial supervision measures are in some degree conflicted with the goal of liberalization of service trade established by the GATS.Therefore,how to balance the relationship between liberalization of financial services trade and prudential supervision will become an important issue in the exchange of financial services trade between countries.The“prudential exception”clause of the“Financial Services Annex”emerged in the GATS.It can require that the financial supervision rules be supervised by various WTO agreements,as well as balance the liberalization of financial services trade with the stability of a country's financial system.With regard to security,it is easier to reach consensus on the issue of financial services trade among WTO members.But similarly,the principle is strong in principle,there is a certain amount of discussion space in various aspects such as the definition of related concepts and the scope of application,and the number of international trade cases related to the principle of prudence and exception is relatively small in practice.The results of the 2015 financial services case in Argentina have become one of the most important cases for discussing and analyzing the application of the principle of prudence and exception.This article is based on this case and is based on a more comprehensive statement by the expert group report on the principle of prudence and exception,and discuss about the important role and relevant revelations for the future development of China's financial industry.In addition to the text and conclusion,this article includes the following three parts.The first part is "The Arguments and Focus of Argentine Financial Services Case".This part is the introduction of the full text of the case and discusses the issue of the legitimacy of relevant laws issued by Argentina and the tax authorities in Panama and Argentina.In this case,there were eight disputes between the chief complaint and the respondent party.Among them,regarding measures five(reinsurance services)and six measures(conditions for capital market access),Argentina cited Annex 2(a)as a prudent exception clause to appeal for relevant regulatory measures.With regard to legal measures,the Group of Experts,after reviewing the claims of the Panamanian and Argentinean parties on the interrelated measures,determined that the formulation of Measures 5 and 6 affected the development of normal financial trade between the so-called "non-cooperative countries" and Argentina.The second part is "the basis for justification of the principle of prudence and exception".This section is based on the opinions in the expert group report,combined with the literature review of domestic and foreign experts,specifically expounding on the definition of the concept of prudential exceptions,the definition of the concept of prudent reasons,and the analysis of the "relevant measures based on prudent reasons".A more comprehensive discussion of the principle of prudence and exception was conducted.The group of experts gave a relatively broad interpretation of the definition of the principle of prudence and exception and the reason for prudence.At the same time,it considered that there must be a reasonable causal link between the reasons for prudence and the relevant prudential measures.Therefore,the final conclusion of this case was the cautious reason and prudence of the relevant Act of Argentina.There is a lack of a reasonable correlation between the measures,and it is therefore determined that the measures of conflict do not meet the requirements of the prudent exception clause.The third part is "the inspiration of the principle of prudence and exception to China's financial supervision".This section mainly discusses how the provisions of the GATS's prudential exclusion clause apply to China's financial supervision work,mainly from the three aspects of legislation,law enforcement and the flexible use of prudent exception provisions.This article believes that the formulation and use of any financial terms are based on the maintenance of financial stability in the country.Therefore,this paper believes that the financial regulatory system can be improved,the financial supervision and management system can be improved,the financial security and efficiency can be taken into account,and the regulatory enforcement capacity can be improved.In order to maintain the stability of financial operations,we will combine the principle of prudence and exceptions to strengthen our ability to resist risks.